US stocks gain following latest Greek debt deal

Joshua Freed, AP Business Writer
US market shakes off Greek worries and advances

Specialist John J. Ohara works his post on the trading floor of the New York Stock Exchange, Monday, Feb. 13,2012. U.S. stocks rose Monday after Greece's parliament voted for spending cuts so it can get a bailout to save the country from bankruptcy. (AP Photo/David Karp)

U.S. stocks rose Monday after Greece's parliament voted for spending cuts so it can get a bailout to save the country from bankruptcy.

The gains were broad-based, with all 10 categories of stock in the Standard & Poor's 500 rising, led by financial stocks. European stocks rose, too.

The Dow Jones industrial average was up 61 points at 12,862 in midday trading. The broader Standard & Poor's 500 index rose seven points to 1,350. The Nasdaq composite rose 20 points to 2,924.

In earlier trading Monday, the Dow had risen as much as 83 points.

Despite riots in Athens during the vote Sunday, the Greek government approved sharp cuts in civil service jobs, minimum wages and welfare. The cuts were required by international lenders in exchange for a $170 billion bailout package.

Other details of the bailout still need to be finalized, and the riots in Athens were a reminder that Greece's financial problems are not solved.

The Greek debt deal amounts to a default because creditors will get less than they are owed, said Peter Cardillo, chief market economist for Rockwell Global Capital.

"Orderly default is better than a chaotic default, which would lean on the whole eurozone and the global economy as well," he said, referring to the 17 countries that use the euro currency.

Cardillo said market gains may be muted for a while because of social unrest in Greece and because stocks have already risen this year. The Dow is up 5.3 percent.

Stocks in Europe rose. The FTSE 100 in Britain rose 0.9 percent to 5,906. Germany's DAX rose 0.7 percent to 6,738. The CAC-40 in France rose slightly to 3,385. In Athens, stocks rose 4.6 percent.

The euro fell a fraction of a penny against the dollar, to $1.32.

In Asia, Japan's Nikkei 225 closed 0.6 percent higher at 8,999, and Hong Kong's Hang Seng gained 0.5 percent.

Shares of ATM maker Diebold Inc. rose almost 9 percent after it reported strong sales to banks, a sign they may be willing to spend more to upgrade their technology.

The Greek debt deal appeared to take some pressure off U.S. banks. Moody's Investors Services said the $25 billion settlement between mortgage lenders and states over foreclosure practices announced last week is a negative for all five major banks involved. However, most major banks, which have varying levels of exposure in Europe, gained on Monday.

Bank of America rose 2.5 percent, JPMorgan Chase and Citigroup each gained 1.5 percent. Financial stocks as a group led the S&P on Monday with a gain of three-quarters of a percent. They have been the best performers in the S&P this year, gaining 13 percent.

Apple rose 1.4 percent and for the first time crossed $500 per share, before falling back to $499.76.

Oil rose to $100 a barrel in New York.

Gold fell slightly to $1,722.90 per ounce, and other metals were down slightly, too.

The yield on the 10-year Treasury note fell slightly to 1.975 percent.